Which of the following statements is true?
A)The average of an exponential time series is a linear function of time.
B)The average of a linear sequence is an exponential function of time.
C)When a series has the same average growth rate from period to period, it can be approximated with an exponential trend.
D)When a series has the same average growth rate from period to period, it can be approximated with a linear trend.

Question

Quizplus · Accepted Answer

This statement is known as the constant growth rate assumption, where the average growth rate of a time series remains the same over time. Under this assumption, the series can be approximated with an exponential trend. Therefore, option C is true. Option A and B are incorrect because they state the opposite of what is true. Option D is incorrect because constant growth rate implies an exponential trend, not a linear trend.

Which of the Following Statements Is True